GUWAHATI: The Centre on Sunday, June 7, said Indian households continue to pay some of the world's lowest cooking gas prices despite a sharp rise in international LPG costs, with a 14.2-kg domestic LPG cylinder priced at ₹942 for general consumers against a supply cost that has risen to over ₹1,600.
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According to official figures released by the Centre, beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) pay an effective ₹642 per cylinder after receiving a direct benefit transfer of ₹300 on the first four refills each year, amounting to ₹1,200 annually per beneficiary.
The Centre said the gap between the international cost of LPG and the regulated retail price has resulted in an under-recovery of about ₹700 on every domestic cylinder, which is being absorbed by public sector oil marketing companies with partial support from the government.
Official data released by the government showed that LPG prices paid by Indian consumers remain lower than those in neighbouring countries, including Pakistan, Nepal, Bangladesh and Sri Lanka, as well as developed economies such as the United States, Australia and Canada.
The government attributed the rise in supply costs to higher international LPG prices following disruptions in West Asia. The Saudi CP benchmark for LPG increased from about US$543 per tonne in February to US$790 per tonne in June, a rise of around 46 per cent.
While commercial LPG cylinders used by hotels and businesses are revised monthly in line with international prices, domestic cooking gas prices are regulated and have not reflected the full increase in global costs, the Centre said.
The government also said there was no shortage of petroleum products despite disruptions affecting shipping through the Strait of Hormuz, a key route for India's energy imports. It stated that LPG bottling and distribution operations continued normally across the country.
According to the Centre, domestic LPG production was increased from about 32 TMT to 52 TMT during the disruption, while sourcing was expanded to suppliers in countries including the United States, Canada and Algeria. Authorities also stepped up measures to prevent diversion of subsidised domestic LPG into commercial markets.
The government said cumulative under-recoveries on domestic LPG reached ₹60,000 crore by the end of the last financial year, up from ₹41,338 crore a year earlier. The Union Cabinet has approved ₹30,000 crore in compensation to marketing companies to partly offset these losses.
The Centre said more than 10.58 crore PMUY beneficiaries continue to receive direct benefit transfers of ₹300 per cylinder on the first four refills annually, in addition to the regulated retail pricing of domestic LPG.